Embed Size (px)
Citation preview
Hotel, Tourism and Leisure
TM
Asia Pacific
The global leader inhospitality consulting
Hospitality: one of the world’s largestindustries, with travel and tourismaccounting for 9% of Global GDP*.
Horwath HTL: a world leader inhospitality, offering experience andexpertise across the Hotels, Tourismand Leisure spectrum.
If you’re involved in hospitality,Horwath HTL can advise, assistand work with you to help yourealise your goals.
Our experience
• Conference Centers
• Convention & Exhibition Centers
• Clubs
• Cruise Ships
• Fractional / Vacation Ownership
• Golf Courses
• Hotels
• Mixed-use Developments
• Resorts
• Restaurants
• Serviced Apartments
• Spas
• Timeshare / Vacation Ownership
• Tourism
• Tourist Attractions
The world leader in one of the world’s largest business sectors
* Recent WTTC estimate
Welcome to Horwath HTL,the world’s number onehospitality consulting group.
We are the industry choice;a global group offeringcomplete solutions, inmarkets both local andinternational.
Over the last 20 years,and through involvementin thousands of projects,we have amassed extensive,in-depth knowledge andunderstanding of the needsof hotel & real estatecompanies and financialinstitutions.
Whatever your requirements,large or small, national orglobal, Horwath HTL canhelp you succeed.
Our expertise
• Accountability Reviews
• Asset Management
• Asset Valuation
• Best Use of Land Analysis
• Brand Expansion
• Capital Expenditure Cost / Benefit Analysis
• Corporate Mergers & Acquisition Advisory
• Destination & Large Scale Project
Master Planning
• Due Diligence
• Hotel Management Company Selection
& Contract Negotiation
• Insolvency / Receivership
• Investment & Divestment Strategy
• Litigation Support
• Market & Financial Feasibility Studies
• Market Entry Strategy
• Operational Reviews
• Planning & Development
• Product Conceptualisation
• Repositioning Strategy & Analysis
• Strategic Planning
• Tourism, Planning & Development
• Transactions & Financial Restructuring
TM
50 offices globally • 39 countries • 10 offices serving Asia Pacific
Sydney
Auckland
Beijing
Shanghai
Hong Kong
Kuala LumpurSingapore
Jakarta
Tokyo
Mumbai
Cape Town
AUSTRALIA• Due Diligence & Sales Agent for: ANA Harbour Grand
Sydney; Marriott Resort Surfers Paradise; Four SeasonsSydney (formerly Regent Sydney)
CHINA• Market & Financial Feasibility for: Park Hyatt, Shanghai;
Hyatt on the Bund, Shanghai; The Puli Hotel and Spa,Shanghai; Hotel Indigo, Shanghai; Hotels in Disneyland,Shanghai; Ritz Carlton and JW Marriott, China Central Place,Beijing; Ritz Carlton Sanya Yalong Bay, Hainan Island;Hilton Sanya Resort and Spa, Hainan Island; SheratonSanya Resort, Hainan Island; Grand Hyatt Shenzhen;St Regis Lhasa, Tibet
INDIA• Market & Financial Feasibility of the Grand Hyatt, Mumbai;
Hyderabad International Convention Centre;Oberoi Rajvilas, Jaipur
INDONESIA• Macro Tourism Analysis & Master Plan
for Nusa Dua Tourism Complex, Bali• Market & Financial Feasibility for the
InterContinental, Jakarta
JAPAN• Market & Financial Feasibility for Park Hyatt, Tokyo• Due Diligence & Operator Selection for Hilton Niseko Village• Due Diligence for Niseko Northern Resort, Annupuri
MALAYSIA• Master Planning for Kuala Lumpur Convention Centre Hotel• Market & Financial Feasibility of the Westin Kuala Lumpur
NEW ZEALAND• Business Case Analysis of Skycity, Auckland• Market & Financial Feasibility of the
TelstraClear Pacific Events Centre, Manukau
PHILIPPINES• Market & Financial Feasibility, and Renovation Study
of the InterContinental, Manila• Market & Financial Feasibility for El Nido Resorts, Palawan
SINGAPORE• Market & Financial Feasibility of the
Crowne Plaza Hotel Changi Airport• Market Study, Facilities Planning & Financial Analysis
for Suntec Singapore International Convention andExhibition Centre
SOUTH KOREA• Due Diligence for the Acquisition of the Seoul Hilton Hotel• Operator Selection & Contract Negotiation for Hilton
Namhae Gold and Spa Resort
THAILAND• Redevelopment Planning of the Siam Paragon and Siam
Kempinski (formerly InterContinental Siam), Bangkok• Opinions of Value for the InterContinental and Holiday
Inn Bangkok (formerly President Park Complex)
VIETNAM• Market & Financial Feasibility of the Nam Hai, Hoi An• Operational Review of the Sofitel Legend Metropole, Hanoi• Market & Financial Feasibility of the InterContinental
Asiana, Saigon
A Representative Sample of Projects
AUSTRALIA
John Smith
T +61 2 9320 1777
Vasso Zographou
T +61 2 9320 1777
CHINA (BEIJING)
Julie Dai
T +86 10 8518 1833
Wang Shu
T +86 10 8518 1833
Allan Jiang
T +86 10 8518 1833
CHINA (HONG KONG)
Nigel Summers
T +85 2 2524 6073
Gloria Chang
T +85 2 2524 6073
CHINA (SHANGHAI)
Zoe Wu
T +86 21 6136 3248
INDIA
Vijay Thacker
T +91 22 6631 1480
INDONESIA
Rio Kondo
T +62 21 527 7718
JAPAN
Koji Takabayashi
T +81 3 5465 0295
Kazuhiro Kaneko
T +81 3 5465 0295
MALAYSIA
Sen Soon Mun
T +60 3 2615 0122
NEW ZEALAND
Stephen Hamilton
T +64 9 309 8898
Terry Ngan
T +64 9 309 8898
James Parkinson
T +64 9 309 8898
SINGAPORE
Robert Hecker
T +65 6 735 1886
Damien Little
T +65 6 735 1886
Steve Baek
T +65 6 735 1886
TM
Local Expertise, Global Perspective
Local Office Directors
Why Horwath HTL?
Rich History Founded in 1915 in New York City, Horwath HTL has the oldest and
largest hotel and tourism consultancy practice in the world.
Global Network Horwath HTL is a member of the Crowe Horwath International Network,
ranked among the top 10 global accounting networks with more
than 590 offices in more than 107 countries around the world.
Focus Specializes exclusively in the hotel and tourism related sectors.
Highly Independent Horwath HTL has a strong independent team of industry professionals.
Experience Almost a century of hospitality experience.
International Recognition Horwath HTL's professional opinions are well recognised and respected
and Credibility among international hotel companies, investors, developers and
financial institutions.
Industry Originator Created the Uniform System of Accounts for Hotels
(the industry standard).
Helping you get results atall stages of a project’s life
Planning andDevelopment:
• Appraisal Reports
• Destination & Large Scale
Project Master Planning
• Facilities Programming
• Highest & Best Use
• Hotel Management
Company Selection
& Contract Negotiation
• Macro Tourism Analysis
• Market & Financial
Feasibility Studies
• Market Entry Strategy
• Product Conceptualisation
& Financial Structuring
• Residual Land Valuation
• Strategic Planning
• Tourism Planning
Asset Management(Operations):
• Accountability Review
• Asset Management Advisory
• Benchmarking
• Best Practice Analysis
• Capital Expenditure
Cost/Benefit Analysis
• Litigation Support
• Loan Underwriting
• Operational Reviews
• Owner Representation
• Property Tax Review
• Reposition Strategy
& Analysis
Transactions and FinancialRestructuring:
• Asset Valuation
• Corporate Mergers &
Acquisition Advisory
• Due Diligence
• Insolvency/Receivership
• Investment & Divestment
Strategy
• Loan Work-out
• Pre-Lending Review
• Strategic Management
& Planning
• Transaction Management
& Closure
TM
AUSTRALIAHorwath HTLLevel 2, 346 Kent St,Sydney NSW 2000, AustraliaT +61 2 9320 1777
CHINABeijingHorwath HTLUnit 303, Tower E1, Oriental PlazaNo.1 East Chang-An Ave. Beijing,100738, ChinaT +86 10 8518 1833
ShanghaiHorwath HTLUnit 1205A, 12/F, Financial Plaza,333, Jiu Jiang Road, Huang PuDistrict, Shanghai, 200001, ChinaT +86 21 6136 3248
Hong KongHorwath HTLSuite 2006, 20th Floor Central Plaza,18 Harbour Road, Wanchai,Hong KongT +85 2 2524 6073
INDIAHorwath HTL1105 Embassy Centre, 207 NarimanPoint, Mumbai 400021, IndiaT +91 22 6631 1480
INDONESIAHorwath HTLPuri Matari 2, 3rd Floor,Jl. H.R. Rasuna Said Kav. H 1-2,Jakarta 12920, IndonesiaT +62 21 527 7718
JAPANHorwath HTL5/F Village Sasazuka III,1-30-3 Sasazuka, Shibuya-ku,Tokyo 151-0073, JapanT +81 3 5465 0295
MALAYSIAHorwath HTLCEO Suite Level 36,Menara Maxis, KLCC,50088, Kuala Lumpur,MalaysiaT +60 3 2615 0122
NEW ZEALANDHorwath HTLLevel 11, Forsyth Barr Tower55-65 Shortland StreetAuckland 1140, New ZealandT +64 9 309 8898
SINGAPOREHorwath HTL15 Scotts Road,#08-10/11 Thong Teck Building,Singapore 228218T +65 6735 1886
www.horwathhtl.asiawww.horwathhtl.com
Presenting a special excerpt from The Hotel Yearbook 2011 :
The post-crisis outlook in key markets – 20 exclusive situation reports from Horwath HTL
HOTEL 2011W h a t t o e x p e c t i n t h e y e a r a h e a d
HOTELyearbook2011
Picking up steamHOW WILL 2011 PLAY OUT FOR THE KEY HOTEL MARKETS IN EUROPE ? TO GET AN IDEA OF THE CURRENT SITUATION AND VARYING PACE OF RECOVERY ACROSS THE CONTINENT, THE HOTEL YEARBOOK ASKED HORWATH HTL FOR AN ASSESSMENT. NINE DIFFERENT OFFICES CONTRIBUTED TO THIS EXTENSIVE REGIONAL OUTLOOK, WHICH EXAMINES MARKETS FROM SPAIN AND IRELAND TO RUSSIA AND MONTENEGRO.
UNITED KINGDOMSITUATION REPORT
The last few years have proved extremely challenging for UK
hoteliers as the global economic recession took hold.
Since the onset of the financial crisis, UK hoteliers have
witnessed declines in business and leisure demand, as
corporate travel budgets were slashed and uncertainty gripped
the nation, resulting in countrywide occupancy falling from 73 %
in 2007 to 68.7 % in 2009, according to STR Global (the source
for all the performance data you see here). Rates were quick
to follow as hoteliers attempted in vain to stimulate demand,
and corporate room lets were replaced by lower-yielding leisure
bookings with Average Daily Rate (ADR) declining from £82.78
in 2008 to £78.23 in 2009.
2010 has brought its own challenges to UK hoteliers : the
nationwide « white out » early on in the year was followed by
severe disruption to travel as a result of the Icelandic volcanic
ash cloud ; then in May, the change to a new Conservative-
Liberal Democrat coalition government which has instigated
tough spending reviews and announced a number of austerity
measures. Nonetheless, the landscape appears to be improving
for UK hoteliers, with year-to-date RevPAR (to September 2010)
up 7.4 % to £57.32 compared to the same period last year.
However, there remains a major disparity between London and
UK regional performance, with London hotels faring significantly
better than their regional equivalents and driving much of the
overall uplift in UK hotel performance. In fact, London hotels’
recovery started towards the end of 2009, achieving the highest
occupancy ever recorded in Q4. The capital has now posted
R E G I O N A L O U T L O O K : E U R O P E
11 months of almost uninterrupted occupancy growth (with
the exception of April 2010, thanks to the Icelandic volcano).
Unquestionably, London hotels benefited from the weak pound,
which encouraged overseas leisure visitors and abated further
occupancy declines. In addition, hotels in the capital are less
dependent on domestic corporate and leisure demand than
their regional counterparts, and combined with a greater pricing
power, this has made London hotels more resistant to the
significant rate cuts undertaken across the provinces. Year-to-
date performance data is extremely encouraging with a 12.2 %
increase in RevPAR compared to the same period last year,
reaching £101.67. In essence, London remains a global center
for finance, business, culture and entertainment, and thus acts
as a 365-day a year attraction and hotel hotspot.
UK regional hotel performance, on the other hand, is a
somewhat different and less upbeat story, as domestic
business travel frequency plummeted, forcing rate cuts which
continue today. Year-to-date performance records a 1.3 %
decline in ADR to £61.28 compared to the same period last
year. On a positive note, however, corporate travel, conferences
and meetings are displaying early signs of a slow resurgence
with occupancy recovering, resulting in a 3.0 % year-on-year
RevPAR increase to £41.67 for year-to-date. Although during
previous downturns, the UK regional hotel market has tended
to be more resilient than London, a more sophisticated regional
hotel industry with active yield management has increased the
competitiveness in the regions and thereby the impact of the
downturn this time around.
HOTEL TRANSACTIONS AND VALUES
The limited availability of debt as a result of the credit crunch
has undoubtedly caused a seismic shift in the UK investment
market and this, coupled with the decline in trading as described
above, has resulted in a considerable reduction in transaction
volume, be it financing for new acquisitions or refinancing of
existing assets. As a result, many hoteliers have struggled to
meet their loan repayments, and a number of high-profile hotel
groups as well as many independents went into administration
over the course of 2009. Some of the highest-profile casualties
In fact, London hotels’ recovery started towards the end of 2009, achieving the highest occupancy ever recorded in Q4
included Folio Hotels, Swallow Hotels and the Real Hotel
Company. While distressed assets have not entered the market
at the rate anticipated, with lenders reluctant to crystallize
their losses, 2010 has continued to see some companies go
into receivership, the latest example of note being the Eton
Group. We anticipate further distressed sales in 2011, although
it remains to be seen how active the banks will be in terms of
foreclosing due to the likely or potential losses on these deals.
Nonetheless, 2010 has witnessed some high-profile
transactions, including The Cumberland Hotel, the Le Meridien
Piccadilly, Blakes Hotel, the Jolly St Ermin’s Hotel, the Hilton
Hyde Park and the St James’s Hotel and Club. It is notable,
however, that all of these transactions relate to properties
situated in London, demonstrating the capital’s continued
appeal. London’s resilience during market fluctuations has
meant that the city continues to be a very attractive investment
market. In addition, the weak pound made London even more
attractive during this period. Purchasers today are largely
cash-rich buyers/high net worth individuals (HNWI) who now
have a purchasing advantage. Highly leveraged investors such
as private equity funds who previously dominated the market
during the boom period are expected to remain less active,
giving way to more opportunistic buyers as well as HNWIs and
sovereign wealth funds.
The cost and availability of debt is likely to remain a key factor
in shaping the market going forward. Deal terms have changed
significantly since the peak, with lower loan-to-value ratios (50-
60 % compared to 85 % pre-crisis) in addition to higher margins
and arrangement fees, and we anticipate that lending levels are
unlikely to return to historic highs in the short to medium term,
if ever. Finance is available for the right project, however, and
we are likely to see a continued preference for deals relating to
fixed-income, smaller lot sizes, existing proven hotels, gateway
cities, high-quality operator/tenants, budget/economy segment
and trophy assets. The large portfolio deals that characterized
the UK hotel market pre-crisis are unlikely to return, with the
focus likely to continue on single assets in the short term.
Any increases in value in the short to medium term are likely
to be more the result of improving hotel performance than the
investment dynamics that characterized the peak, and even in
the longer term, it is questionable whether we will ever see a
return to the pricing levels witnessed between 2003 and 2007.
THE OUTLOOK FOR 2011
The road ahead, however, is starting to look more positive for UK
hoteliers, with London performance forecast to maintain its strong
rate and occupancy growth into 2011, and UK provincial hotels
projected to recover, albeit at a significantly slower pace than the
London market, as regional economic performance and domestic
corporate travel increase. It is important to stress that any uplift in KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
Picking up steam cont.
ADR in the short term is likely to reflect a change in customer
mix as higher-yielding corporate, conference and passing
clients return, rather than any increase in prices. While UK hotel
performance will continue to be influenced by the strength of the
pound, uncertainty regarding interest rates, consumer confidence
and the government’s Comprehensive Spending Review, all have
the potential to hamper the projected recovery, especially as public
sector travel and training/conference budgets are likely to be
cut significantly. In short, the UK hotel sector relies on the public
sector for a substantial share of its revenue, and those markets
that are most dependent upon the public sector – typically the
regional hubs – are likely to be most impacted by any such cuts.
WINNERS AND LOSERS
While the budget and luxury segments have not escaped
the negative effects of the downturn, they have fared better
than the overall market, and looking to 2011 and beyond, we
anticipate that this is likely to continue. The mid-market sector,
on the other hand, is likely to continue suffering, especially in
the regions, as it continues to find itself being pressured by
the newer top-end limited service properties and faces the
threat of being sidelined by recently repositioned or re-branded
properties. In addition, those hotels which are branded are most
likely to outperform their independent counterparts.
Crucially, in under two years Britain will be under the global
spotlight in the run-up to the London 2012 Olympic and
Paralympic Games. This major event is expected to bring
about an unprecedented level of media exposure and assist in
enhancing Britain’s image abroad. It is therefore anticipated that
London, and to a lesser extent, the UK hotel market will benefit
from this exposure and enjoy a significant return to form.
Contributed by Alexandra van Pelt and Erlend Heiberg
GERMANYSITUATION REPORT
The recent financial downturn has also hit the German hotel
market, and official figures of the Federal Statistical Office
in Germany show that the number of overnights in 2009
decreased between 0.1 % and 0.2 %. A downturn in this sector
has not been recorded since 2002 and can be attributed
to the global market decline. However, on an international
scale Germany has posted better performance in 2009 than
tourism worldwide : With 132.8 million guests in German
accommodation facilities and 368.7 million overnights in 2009,
the decrease was below the global decline of 4 %.
With regard to the performance of hotel prices in Germany,
the recession in 2009 caused a decline in hotel room rates.
Although prices have been raised by 2 % worldwide in the
second quarter of 2010 compared to the previous year
(according to www.hotels.com), the global price level remains as
low as in 2004. Germany has an average room rate of €89 and
is placed at position number 14 among the 22 most important
tourism destinations in Europe. Nevertheless, Germany can
note an increase of 3 % in average room rates compared to the
second quarter of 2009.
THE OUTLOOK FOR 2011
The « ultimo effect », where market prices often increase
drastically towards the end of the year, has led to positive
expectations on the part of investors for the year 2011. In
general, the hotel industry in Germany is showing signs of
recovery, which might also be due to the decrease in VAT to
7 % on hotel accommodation. Other political discussions which
may affect the German tourism industry in 2011 is Chancellor
Merkel’s introduction of a tax on air transport, taking effect in
Nevertheless, Germany can note an increaseof 3 % in average room rates compared to the second quarter of 2009
R E G I O N A L O U T L O O K : E U R O P E
January 2011. How big the impacts of these policies will be on
the German tourism industry remain to be seen.
Considering future investment projects, such as expansions of
international hotel chains within Germany, the tourism industry
seems to have regained confidence after a long downturn.
Meanwhile, two fascinating developments will dominate the
2011 landscape here :
Dubai-based luxury hotel company Jumeirah is about to
launch a major new 5-star hotel in Frankfurt, following
an agreement to lease and operate the hotel element
of the city’s major new PalaisQuartier leisure and retail
development, a project of MAB Development. The opening
of the 219-room luxury hotel is set for late 2011. « We believe
this agreement will see the establishment of a world-class,
market-leading luxury hotel in Frankfurt city center, » said
Gerald Lawless, Executive Chairman of Jumeirah Group.
In 1997 investors were first chosen for what was then called
the « Airrail Center » at Frankfurt Airport. Now the planning for
« The Squaire, Frankfurt » – its new name – is in place. Original
plans called for an investment of €600 million, assuming
construction work could start in early 2003 so that the grand
opening would take place in 2006. The enormous building
(660m long, 65m wide and 45m high) will boast, among other
companies, two hotels by Hilton. The Squaire will finally open
in early 2011, and these hotels are not the only ones planned
to open in Frankfurt. Currently, around 20 hotel developments
are in the pipeline indicating the demand for room nights for
this important hub. This is not least due to the recovery of the
market and the extension of the airport with a third terminal
which will inevitably bring additional business.
Contributed by Rüdiger Knospe
FRANCESITUATION REPORT
Most economists agree that 2010 marks a rebound in France, as
elsewhere in the world. Public re-launch plans, combined with low
interest rates, are starting to produce positive effects on the economy.
However, as observed for the Euro zone globally, growth in GDP was
moderate in France for 2010, reaching only 3 % at current values.
The graph presented here shows the recent evolution of GDP
growth for France, and the corresponding evolution of RevPAR.
FRANCE : GDP AND REVPAR GROWTH
Source : INSEE/Horwath HTL
-12
-8
-4
0
4
8
12
16
RevPAR GDP in value
-9
-12
-6
-3
0
3
6
9
12
15
1997
1999
2001
2003
2005
2007
2009
2011
Soccer 98
Rugby 07
Sept 11
IraqSubprimesC
hang
e in
cur
rent
GD
P %
Cha
nge
in R
evPA
R %
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
Induced economic sectors including air travel and hotels are
recovering, with an acceleration expected for the last quarter of
2010. As a consequence, RevPAR recorded for the first three
quarters of 2010 is anticipated to have grown 5 to 6 % vs. the
previous year. This performance is better than expected due to
a strong performance in Paris and in the upscale segment. It
has to be noted also that the impact of the October 2010 strikes
was offset by the Paris Motor Show which is organized every
two years.
On the development side, financing organic development is
still an issue, as credit terms and equity-to-debt ratios are very
challenging. However, the transaction side is more active with the
recent takeover of the B&B budget chain by Carlyle (€480 M) and
the continuing disposal of the Concorde portfolio by Starwood
Capital Europe including two major Paris hotels : Lutetia (€150
M) and Crillon (€250 M).
THE OUTLOOK FOR 2011
The outlook is positive as growth in GDP is anticipated by
economists to accelerate moderately.
A poll conducted by IPSOS in August 2010 confirms this regain
of confidence, as 76 % of hoteliers share the sentiment that
the business climate is improving. It has to be noted that this
trend has not only been improving month after month since
the beginning of 2010 but also is the corresponding figure for
any month in 2009. Moreover, 17 % of hotelkeepers surveyed
declared they are intending to hire additional permanent staff
vs. only 13 % in 2009.
Among other positive signs, it has to be noted that France will
head the Group of Twenty in 2011 after South Korea in 2010. It is
anticipated that several political summits would be organized, not
only in Paris but in Deauville and Cannes as well. This is likely to
boost international visibility to these French upscale destinations
and thus contribute to raise RevPAR locally. Nationwide, it is
reasonable to anticipate growth in the range of 6 to 8 % with a
stronger dynamic in Greater Paris and the top ten metros.
In Paris, 2011 will coincide also with significant additions
in supply in the top-end segment, as this segment today
comprises 8 properties but will rise to 10 with the addition of
the Shangri-La and Mandarin Oriental units next year, followed
by Peninsula in 2012. Those properties should have no major
difficulty reaching a strong occupancy level, but a stronger
pressure on ADR is to be anticipated in the entire segment.
Contributed by Philippe Doizelet
NETHERLANDSIn 2010 the classified hotel market in The Netherlands consists
of circa 2,100 hotels and more than 90,000 hotel rooms.
Compared to the millennium, the supply of hotels increased
by 2 %, whereas the supply of hotel rooms increased by 20 %.
Dutch hotels are clearly scaling up, which is closely related to
an increasing share of chain-related hotels. In 2010 at least
55 % of all classified hotel rooms are chain related. Even in
2009 the Dutch classified hotel supply increased by more than
2 %. These additions to the market had already entered the
development phase when the international economic crisis hit
and therefore remained unaffected. However, some did have
difficulties finding an operator, the best example of which is the
Symphony Hotel on the Amsterdam South Axis.
Although many planned developments faced serious delays or
were even cancelled, other developments were pushed through
the pipeline despite the economic challenges. Particularly
the capital, Amsterdam, will welcome additions to the hotel
market with impressive projects such as the IJdock hotel. The
Among other positive signs, it has to be noted that France will head the Group of Twenty in 2011 after South Korea in 2010
Picking up steam cont.
R E G I O N A L O U T L O O K : E U R O P E
4 or 5-star hotel with almost 300 rooms will be surrounded by
the Court of Justice, 25,000m! of office space, 70 high-end
apartments and a whole lot of water; the hotel will open at 4-star
plus level in 2013. Further, between the main shopping area
and the major museums, a 130 room « 6-star » hotel will open
in 2011in the former conservatory, done by Alrov Group, who is
working on a similar job in the former Café Royal near Piccadily
Circus in London. A 500-room City Inn near Central Station and
the opening of a 200-room 4-star hotel on the South Axis will
make 2011 a busy year for openings in Amsterdam.
Despite the observed continued growth in hotel supply, in
2009 transactions in the Dutch hotel market were scarce. The
registered transaction volume in the Dutch hotel market in
2009 was almost 80 % smaller than the record volume in 2008.
Fortunately, 2010 shows the first signs of improvement. The
transaction volume in the first two quarters of the year was a
little more than the transaction volume for all four quarters of
2009. It is safe to say that transactions are slowing picking up.
Some parties are particularly interested in acquiring distressed
properties. For example, the Dutch Hotel Management Group
acquired at least three hotels under the Fletcher brand, leading
to a total of almost 40 hotels. Others want to free up financial
sources for management expansion ; e.g. Accor continues
with colossal sale and lease back transactions in the Benelux
and surrounding countries ; and still others wish to roll out a
new brand.
The increase in hotel demand since the millennium has been notably
smaller than the increase in supply, particularly during the last
couple of years. In 2008 and 2009 the number of overnight stays in
Dutch hotels even decreased by 4.5 % and 3.4 % respectively. This
is largely caused by tightening budgets in the business segments.
As a result, the occupancy rate in the Dutch mid and high level
market decreased from 73 % in 2007 to 62 % in 2009, and the
average room rate from €110 in 2007 to €93 in 2009, according
to the 33rd annual edition of Horwath HTL’s HOSTA report.
This caused the average RevPAR to have decreased by almost
28 % since 2007 – there has not been a steeper decrease for
30 years. Also profit margins decreased, both relatively and in
absolute numbers. The gross operating profit, in percentage of
total revenues, reached the lowest level since 1995.
Mid-2010, occupancy rates are slowly increasing, which is the
first sign of recovery. Based on historic patterns, the average
REAL AND EXPECTED PERFORMANCE, DUTCH MID AND HIGH
LEVEL HOTEL MARKET
Source : Horwath HTL
60
62
64
66
68
70
72
74
76
78
2007 2008 2009 2010 2011
RevPAR ARR %
40
60
80
100
120
AR
R &
Rev
PAR
in €
Occ
upan
cy in
%
KE
Y M
AR
KE
TS
IN
20
11
room rates are supposed to follow, but they are still taking their
good time. Although recovery so far is slow to say the least and
a gloomy few of the hoteliers interviewed expect the recovery
phase to last to 2015 or later, the majority of the interviewees
(78 %) expect the Dutch hotel market to have fully recovered in
2012 or 2013.
Contributed by E.G. Hoogendoorn and R. Lardenoye
THE BALKANSThe Balkan countries are considered to be an emerging leisure
and business market, with Croatia, Montenegro, Bulgaria,
Romania and Serbia the most important players. More
standardized and comprehensive tourism statistics need to be
implemented throughout the region in the next few years.
Due to the recent economic slowdown, Croatian tourism has
experienced some negative trends in KPIs in 2009 ; while in
2010 ADR is expected to rise by 9.9 %, occupancy by 1.3 %
and RevPAR by 13.3 % compared to 2009. Privatization of
several state-owned hotel companies is certain. As the Croatian
hotel sector experienced only a minor negative impact of the
global economic crisis in 2009, modest growth in performance
is expected in the coming year. Further stabilization is
expected, as well as accession to the EU. In terms of new hotel
developments that will appear on the Croatian hotel market,
there are few major projects planned for opening in 2011.
Althought the crisis did hit the Bulgarian hotel market, new
hotels were built and further growth is expected, thus leading
to an oversupply in hotel accommodation. There are some
city hotel projects for 2011, but the pipeline is not clear due
to lack of financing. Slight improvements in hotel operating
performance indicators is expected in terms of recovering
rates of occupancy (up to 60 % in city hotels), and the ADR of
branded properties will also tend to rise, ranging between €60
and €85. Meanwhile, a new tourism law is being drafted, and a
flat 9˚% VAT will also be introduced from April 2011.
Romanian tourism is mostly business-related (more than 50 %
of arrivals), while the leisure aspects of tourism are in their
early phase of development and are local market-driven. Like
the whole Romanian economy, the hotel industry was hit hard
by the financial crisis in 2009, with both occupancy and ADRs
decreasing by 25 %. In 2010, a weak recovery is expected
while in 2011 increases of about 7 % are expected for these
indicators. However, the recovery will be sluggish, and a long
time will be needed to reach pre-crisis performance results.
Montenegro is a highly tourism-dependent country which
means that its government pays a lot of attention to sector
improvements and new tourism policies. This of course did not
stop the impact of the crisis, and in 2009 occupancy decreased
The majority of the interviewees expect the Dutch hotel market to have fully recovered in 2012 or 2013
Picking up steam cont.
R E G I O N A L O U T L O O K : E U R O P E
by 10 % and ADR by 9 %. In 2010, a strong recovery is in
process with an expected 5-10 % increase in occupancy and up
to 5 % in ADRs. In 2011, further recovery is expected with strong
growth rates.
The hotel industry, and the tourism market in general, are
starting to develop in Serbia. Tourism is focused on business
travel in the capital Belgrade and in several second-tier
cities. The recent global economic crisis slowed down the
emergence of Serbia’s hotel and tourism sector, and brought
about a drop in performance. In the year ahead, there are
several mountain and spa resorts planned, while some major
projects are on the way, for example Stara Planina. The
recovery of hotel performance indicators is expected in 2011.
Further development in city and resort capacities is expected,
combined with the penetration of international hotel brands in
Belgrade and in the country’s resorts.
Contributed by Miroslav Dragicevic
RUSSIASITUATION REPORT
2010 has proved to be a better year for hotels in Russia in terms
of trading levels, with significant recovery in occupancy levels,
yet average room rate levels generally remain well below that of
pre-crisis times. A number of new international hotel openings in
Moscow, St. Petersburg and a number of key regional cities have
been tempered by the cancellation and delay to many pipeline
projects for financing reasons as evidenced throughout Europe.
One salient fact that must be borne in mind when considering
Russia as an emerging market is that the economic downturn
has not altered the considerable imbalance between quality
hotel supply and demand.
THE OUTLOOK FOR 2011
Initial signs are that the economy is beginning to move again
as evidenced by the increase in interest from private and
institutional investors since the summer vacation period ended.
At the third Russian Hotel Investment Conference (RHIC) held
in Moscow at the end of October 2010, there was a noticeable
change in mood, with investors now reconsidering some
hotel projects that have been placed on hold over the last two
years. Although lack of domestic bank finance is still a key
characteristic in the Russian economy, it is becoming more
available to those who choose, albeit at punitively high interest
rates. It is likely that the surge in availability of domestic finance
on more attractive and competitive terms will occur only when
international institutions start to lend once again – which is
unlikely to happen quickly.
Return on investment possibilities remain attractive by
comparison to investing in similar type projects in Western
Europe and, as confirmed at RHIC by a number of leading
hotel companies, namely Hyatt, IHG, Hilton and Starwood,
the future pipeline is optimistic, particularly in the mid-market
and economy hotel sectors where projects are being actively
pursued as investors appear to be less cautious.
Tourism is focused on business travel in the capital Belgrade and in several second-tier cities
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
The cost of travelling and staying in Moscow and St Petersburg
still remains high, which together with the issue of most visitors
requiring an entry visa, still acts as a deterrent to many a
business and in particular leisure tourist. Will 2011 be the year
the Russian authorities decide to relax visa requirements ?
And will more low-cost airlines be allowed competitive
access to these cities ? The impact on visitor numbers could
only be positive as proven when the key cities of Eastern Europe
– Prague, Warsaw and Budapest – implemented an « open
skies » policy.
The prognosis for 2011 would appear to be optimistically
cautious, if that is not a dichotomy in itself, as developers start
to press ahead with projects and as the economic climate
improves, increasing demand for hotel accommodation.
Contributed by Michael O’Hare
IRELANDSITUATION REPORT
A game of two halves is probably the best way of summing up
the performance of the Irish hotel market over the last decade.
Up until 2007, Ireland experienced a period of considerable
and uninterrupted growth, with a booming economy and
rising demand as well as significant investment in the sector,
all of which benefited the tourism market and resulted in hotel
performance peaking in 2007. However, the onset of the global
economic crisis in 2008 changed the landscape and the once
roaring Celtic Tiger is now struggling.
The arrival of the downturn caused hotels to suffer a major dip
in demand as corporate and leisure travel reduced significantly,
resulting in occupancy rates declining 14.8 % between 2007 and
2009. According to Horwath Bastow Charleton (HBC), rates fell
to 59.4 %, and this decline in demand has increased downward
pressure on rates, with HBC estimating that room rates have
fallen to those experienced during 1999. This would mean that
profits across Irish hotels have declined by 50 % since 2007.
This downturn alone would have put significant pressure on
hoteliers. However, what has compounded the situation in
Ireland is the substantial oversupply in bedroom stock. While
the development of additional hotels was necessary in order
to satisfy growing demand as the economy expanded, capital
allowance tax incentives and the easy availability of debt led
to an influx of new hotels often without due consideration of
individual projects’ feasibility. This resulted in the number of
OCCUPANCY AND ADR PERFORMANCE REPUBLIC OF IRELAND
Source: Horwath Bastow Charleton
Will 2011 be the year the Russian authorities decide to relax visa requirements ?
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ADR (€) Occupancy (%)
0
20
40
60
80
100
0
10
20
30
40
50
60
70
80€ %
Picking up steam cont.
R E G I O N A L O U T L O O K : E U R O P E
rooms constructed far outstripping demand, with over 40 % of
Irish room stock, equivalent to 25,000 bedrooms, constructed
over the last decade. While in any normal situation this would
prove testing, in today’s challenging market it has brought
saturated markets near collapse.
As a result, it is estimated that over one third of Irish hotels
are struggling to pay interest on their loans and are now
experiencing acute cash flow problems. The combination of
these factors has resulted in an increasing number of hotels
being declared insolvent or going into administration.
Transactions remain scarce, with only one sale of significance
in the first half of 2010, a far cry from the peak of the market
between 2005 and 2007, when around 30 to 40 hotels
sold annually. The hotels which are being transacted are
distressed. The latest victim appears to be Dublin’s iconic
Four Seasons Hotel which was put up for sale by its investors
following a reported €2m loss last year. In 2009, the National
Asset Management Agency (NAMA) was set up by the Irish
Government in response to the global banking and property
crisis with the aim of removing the riskiest loans (mainly linked
to land and development or bad/impaired assets) from the
five participating banks (AIB, Bank of Ireland, EBS Building
Society, Anglo Irish Bank and Irish Nationwide Building Society),
enabling them to restore their capital position and recommence
lending. Worryingly, it is forecast that up to 200 hotels may soon
fall into the hands of NAMA.
THE OUTLOOK FOR 2011
Looking ahead to 2011 and beyond, the oversupply of hotels
in Ireland will continue to hamper any potential recovery and
put pressure on operators as they struggle to raise rates
and improve cash flow. The number of Irish hotels entering
administration looks set to continue and for the most leveraged
owners, their future most likely lies with the decisions of their
banks, creditors or perhaps NAMA.
As such, we forecast that a number of poor performing hotels
will fall out of the market, easing the pressure somewhat
and cleaning up the industry of the poorer quality hotel
stock. Ultimately, the weakest players will not survive. New
branded operators are likely to outmaneuver their independent
counterparts, and those hoteliers that have clear market
positioning and understanding of their guest base, as well as of
their competitors, will be best placed to survive and benefit from
the future upturn.
Worryingly, it is forecast that up to 200 hotels may soon fall into the hands of NAMA
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
The return to growth, therefore, is likely be slow, with hotel
performance largely driven by the return of international visitors
and increasing GDP as Ireland begins its recovery from the
considerable effects of the economic crisis.
Contributed by Alexandra van Pelt and Erlend Heiberg
SCANDINAVIASITUATION REPORT
2009 guest nights were lower in all Scandinavian markets
except Sweden. Denmark saw the largest drop (8 %) from 2008.
In 2010, demand has recovered with Sweden leading the way,
driven by increased MICEET activity in the Stockholm area.
Danish hotel operators are still struggling. An expected capacity
increase of 8-10 % in Copenhagen is likely to depress room
rates and occupancy there.
In Norway as well, increased capacity will continue to depress
average room rates, especially in key city markets and at Oslo
Airport, where Park Inn by Radisson recently opened a new
300-room hotel (see photo).
Choice Hotels Scandinavia is the region’s largest hotel operator
ranked by number of hotel rooms, with Scandic Hotels following
closely. Choice is set to retain its position given the known
development pipeline.
Sweden-based hotel owner Pandox recently acquired the
Norwegian company Norgani to become Europe’s largest
independent hotel property owner (24,000 rooms and growing).
THE OUTLOOK FOR 2011
The regional economy in Scandinavia is performing well – better
than Europe in general – and this will continue to drive demand
for hotel services.
Sweden has recovered more rapidly than the other Scandinavian
countries. RevPAR for the first eight months of 2010 was up
4.6 % on the same period in 2009. 2011 looks to be a good year
for the Swedish market, possibly on par with 2008.
In Denmark, the first half of 2010 continued on a negative
path, but the number of guest nights was picking up. A recent
industry survey reveals that 52 % of Danish hotel operators
expect an increase in guest nights, whereas 32 % expect a
decrease, compared to 2009. For 2011, about 65 % expect
an increase in volumes, whereas only 7 % expect a decrease.
Room rates remain soft and travellers spend less in hotels
and restaurants.
In Norway, only about 20 % of industry professionals expect
occupancy in the second half of 2010 to be worse than 2009,
with about 45 % expecting higher occupancy rates. Room rates
are expected to lag behind but firm up in 2011. Low interest
Sweden has recovered more rapidly than the other Scandinavian countries
Picking up steam cont.
R E G I O N A L O U T L O O K : E U R O P E
rates in Norway encourage investment activity and room
capacity is set to increase by 4.7 % in 2010 and 3 % in 2011.
In the summer of 2011, the largest hotel in Scandinavia will
open in Copenhagen. The Comwell Bella Sky will have 814
rooms and be located next to the Bella Sky conference centre
in Ørestaden.
The FIS Nordic World Ski Championships are to be held in
Oslo, Norway at the end of February 2011, and many hotels
have refurbished and extended their rooms in anticipation of
the event.
LARGEST HOTEL CHAINS IN SCANDINAVIA(Hotel chains active in more than one country)
Choice Hotels Scand. 169 24,435 145
Scandic Hotels 112 20,647 184
Rezidor Hotel Group 47 11,138 237
Rica Hotels 78 10,318 132
Best Western 125 9,861 79
Thon Hotels 59 8,661 147
First Hotels 47 6,381 136
Hilton Group 4 940 235
IHG 2 734 367
TOTAL 641 92,381 144
Several new hotels are being built in Stockholm city and around
Stockholm Airport Arlanda. The Waterfront complex with a 414-
room Radisson Blu hotel will open in 2010/11.
International hotel operators are struggling to establish a market
for management agreements in the region. Scandinavian hotel
owners still prefer fixed and variable leases.
All in all, 2011 looks to be a better year for the Scandinavian
market, but growth may be hampered by strong exchange
rates. Occupancy in major markets like Copenhagen,
Stockholm and Oslo will be affected by capacity increases.
Contributed by Erik Myklebust
SPAINSITUATION REPORT
The Spanish tourism markets have been hit hard by the
international financial crisis. In 2009 Spain lost 9.8 % of its
international tourists, and this large decline took a deadly
toll on the hotel market, forcing hotels in every category into
bankruptcy. In the real estate market, hotel investments fell
25 % in 2009, mostly due to the difficulty in obtaining credit and
the continued gap between buyers’ and sellers’ valuation of
assets, post-crisis.
Fortunately, 2010 has shown signs of recovery and in Spain,
the tourism sector has grown more than GDP and is playing a
key role in the recovery of the Spanish economy. So far during
2010, Spain has experienced a 2 % increase in its international
tourists and a 4 % increase in tourism expenditure. Cities like
Madrid, Barcelona, Seville or Granada, all supporting a good
mix of tourism and business travelers, are the ones leading
the recovery. So far, hotel investment has experienced a 27 %
rebound this year, compensating for the collapse of 2009.
Profound crises like the one we have experienced can change
the shape of things in a market permanently. Insofar as some
products, services and ideas may vanish with the crisis, some
new ones will appear. In the case of Spain during 2010, we have
So far, hotel investment has experienced a 27 % rebound this year, compensating for the collapse of 2009
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
seen that while Spain’s real estate market may still be in the
doldrums, the country’s tourism sector is moving forward and in
a way, is contributing to the recovery of the real estate market.
Back in the sixties, the first large waves of tourists visiting Spain
brought about a booming of the real state sector. Thousands
of apartments were built to host the incoming tourists, and
together with the new apartments came the development of the
complementary tourist offer (i.e. bars, restaurants, shops, etc.)
THE OUTLOOK FOR 2011
Nowadays, the tourism sector is playing a very important role
in the recovery of the real estate market. One of the most
successful business formulas used last year in Spain was the
« recycling » of apartment or residential buildings for tourism use.
Unfortunately, Spain has excess capacity in residential products
and these products cannot find investors and barely obtain
credit. Adapting these residential products for tourism use
serves two purposes ; it allows the properties of the residential
buildings to earn some income and therefore service their debt,
and it allows the hotel market more time to absorb part the
current supply. From the perspective of the hotel operators, this
is also a time of opportunity and the crisis has opened up good
residential units as well as old hotels placed in unique locations.
Contributed by Victor Martí
VISITORS TO SPAIN FROM...
United Kingdom 23.57 % Belgium 3.11 %
France 16.65 % Ireland 2.31 %
Germany 16.45 % Switzerland 2.11 %
Italy 6.42 % Rest of Europe 7.32 %
Netherlands 4.41 % US 1.91 %
Nordic countries 6.22 % Rest of America 2.71 %
Portugal 3.51 % Rest of world 3.31 %
Picking up steam cont.
R E G I O N A L O U T L O O K : E U R O P E
LC Torre Europa, Barcelona
HOTELyearbook2011
Patchwork recoveryEVEN FOR ECONOMIC POWERHOUSES LIKE CHINA AND INDIA, THE ROAD HAS BEEN BUMPY THESE LAST COUPLE OF YEARS. TO FIND OUT HOW THESE AND SEVERAL OTHER ASIAN MARKETS WILL LIKELY FARE IN 2011, WE TURNED TO HORWATH HTL, WHOSE CONSULTANTS JUMPED INTO HIGH GEAR TO PRODUCE THIS SITUATION REPORT AND OUTLOOK, COVERING ELEVEN COUNTRIES.
CHINASITUATION REPORT
2010 for the China hotel industry will be remembered as a
year in which the market had a positive turning point ending a
number of consecutive years of declining performance levels
and profitability. Based on data from the 2010 China Hotel
Industry Study, in 2009 the Gross Operating Profit per room
for 5-star hotels in China decreased to a low of RMB 91,752,
the lowest level recorded in the eight year history of the Study.
RevPAR had declined by about 20 % in 2009 following a decline
in RevPAR of 10 % in 2008.
GROSS OPERATING PROFIT PER ROOM – CHINA HOTELS BY
STAR RATING ; 2002 TO 2009
Source :
China Hotel Industry Study (Horwath HTL & China Tourist Hotels Association)
In 2010, this RevPAR decline has been spectacularly reversed,
with China generally recording a RevPAR increase of 31 % for
year-to-date September according to STR Global data. Leading
the way has been Shanghai, with improvements in performance
R E G I O N A L O U T L O O K : A S I A - P A C I F I C
levels well and truly exceeding expectations with RevPAR
growth of about 63 % in 2010. While the 2008 Olympics made
a big bang in Beijing, it was short and sweet and left the city
with a massive hangover in 2009. The 2010 World Expo in
Shanghai, on the other hand, has created a 6-month period of
high demand in the city from which local hoteliers have taken
full advantage. It has allowed the market to get its head above
water and assisted in a pain-free introduction of new supply
(at least temporarily). With both strong growth in occupancy
(36 %) and room rate (19 %), Shanghai has at least set itself up
to weather the storm from continued impacts from new supply
once Expo closes its doors.
China’s other primary hotel market – Beijing – has also had
a positive year, with STR Global reporting growth in RevPAR
of about 30 % year-to-date September. However, while these
numbers sound impressive, the reality is that performance
results are still very low for a major market, with occupancy at
62 % and room rates at approximately RMB 625. Beijing is still
trying to get on top of its oversupply headache, and this can be
particularly seen in its sluggish room rate growth of about 3 %
year-to-date.
THE OUTLOOK FOR 2011
Actually, when looking at the performance levels for both
Shanghai and Beijing in comparison to regional and global
major markets, they do not compare well. Excessive growth in
supply has severely impacted the performance of these markets
and it will take at least another 12 or 24 months before we see
performance numbers befitting their status as major commercial
centres both in Asia and globally.
In fact, China as a whole continues to struggle from a burden
of continuous strong supply growth and this will again be one
of the major themes that we will see the market experiencing
in 2011. There are many hotel markets across the country
that have occupancy levels below 60 % and that still have to
face the impact of new supply in 2011 and beyond. With so
much investment continuing to be poured into the real estate
market, and the typical requirement for many projects to include
2002 2003 2004 2005 2006 2007 2008 2009
3 star4 star
RMB (000's)
5 star
0
30
60
90
120
150
commercial components (most local governments favor hotel
development), developers will continue to develop hotels not
based on the investment potential of the hotel itself, but rather
based on the profits to be made from selling residential properties.
So while I expect to see some continued improvement in
performance levels across the board in China for 2011, I think
that growth will be curtailed by continued additions to new
supply, particularly in regard to the room rate growth potential
of most markets. I will also find it interesting in 2011 to monitor
the performance of the increasing spread of international 5-star
brands into the smaller secondary and tertiary markets, as
well as some deluxe brands into markets outside of Beijing
and Shanghai. For me, there are question marks on the depth
of these markets and their ability to support such brands at
suitable price levels.
Contributed by Damien Little
INDIASITUATION REPORT
The Indian hotel industry is clearly on a roll, although
performance has been somewhat trailing the stronger
development and investment interest.
The Indian economy recovered quickly and rapidly, leading
to a return of international business travel to back sustained
domestic business travel. Hotel demand has consequently
shown healthy recovery in several leading business cities
including Gurgaon/Delhi NCR, Bangalore and Mumbai. Room
rates are yet to rise significantly, with average rates lower than
the peak of 2007-08 by up to 30 % in several cases ; on the
other hand, the peak rates were unreal, and a correction was
overdue and has occurred. Rates of $180-200 for first class
hotels are generally being achieved and will likely be the typical
range for the next 12-18 months. Introduction of new supply –
between 1,500 to 2,000 rooms in each of the above markets
in the last 18 months – has inevitably impacted city-wide
occupancies and rates ; however, the absorption of new supply
has been faster than anticipated, and this points to a strong
performance capability, particularly in the busier winter months.
However, substantial catch-up is needed to get to comfortable
occupancy levels in the mid-70 % range.
The leisure sector has been relatively much slower, particularly
luxury leisure – occupancies fell sharply in the last season,
between 30 % to 50 % of peak levels in some cases. Domestic
leisure uses first class and lower segments and continued to be
strong through the summer ; however, resorts are clearly hoping
for a much better 2010-11 winter season. Luxury leisure has
however held onto its rates, with average rates of up to $450 at
the highest levels and $140-170 in the first class segment.
Some markets such as Pune are working through the impact
of a hotel glut, with several simultaneous hotel completions. On
the other hand, several second tier cities such as Ahmedabad
and Jaipur are attracting significant development interest.
THE OUTLOOK FOR 2011
2011 should deliver better results, with sustained business
travel, continued growth of the Indian economy, attraction
of foreign investments into different sectors and improved
leisure sector performances. Room rates will, however, see
only moderate growth as increased supply comes on board ;
the strengthening of the Rupee means lower local currency
realizations impacting the average room rates.
Thus, there is an air of optimism ; what it leads to is over-
optimistic valuations and expectations which could limit
China as a whole continues to struggle from a burden of continuous strong supply growth
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
meaningful development. Private equity funding is available,
but deals are limited by valuation issues. Development will
diversify into different hotel segments, as compared to a more
5-star oriented attitude. Development will also diversify into
smaller cities and towns, though one would only wish that
the herd mentality would somehow go away ; concentrated
surges of development in specific markets hurts the medium-
term performance and longer-term expectations often to the
detriment of the destination.
The world is looking at India, and will not be disappointed –
though the virtue of patience would be learned in the process.
Contributed by Vijay Thacker
The world is looking at India, and will not be disappointed
Patchwork recovery cont.
R E G I O N A L O U T L O O K : A S I A - P A C I F I C
JAPANSITUATION REPORT
Key performance Indices (KPI) in five key Japanese markets
(Tokyo, Osaka, Kyoto, Nagoya, Fukuoka) had tumbled for
the past two years. Specifically, occupancies at major full-
service hotels in the five cities dropped by 3 to 12 %, ADR by
3 to 12 %, and RevPAR by 10-18 % in 2009 compared to the
previous year.
Amid this turmoil, key hotel investment players dramatically
changed in Japan, which is more notable when you look at the
lineups of off-shore players. Until the recent global financial
crisis, Western investors from the US or Europe had played a
key role in hotel investments in Japan for decades. Horwath
HTL estimates that at least 160 major hotels in Japan are now
owned by overseas investors. Among them, the US-based
Lonestar Funds alone held as many as 72 properties at their
peak in 2009.
In contrast with Westerners, who are looking for exit
opportunities now, Asian investors are now taking center stage
in Japan, with the following recent visible transactions :
Crown Plaza Kobe (592 rooms) purchased by TCC Land
(Thailand)
Hyatt Regency Hakone (79 rooms) purchased by Sun Hung
Kai Properties (Hong Kong)
Hilton Niseko Village (506 rooms) purchased by YTL
Corporation (Malaysia)
70 % of total investment units of Nippon Hotel Fund (REIT)
purchased by Real Estate Capital Asia (Singapore)
Since the beginning of 2010, occupancy in the five key markets
has improved by as much as 1-12 % compared to the same
period in 2009. While ADR is still below 2009 figures by 4-10 %
in the five major cities, we project that ADR at some key cities
start improving in the near future. From our past experience,
average ADR for major hotels begins its upward trend when
their average occupancy stays at about 78 % or higher for a few
consecutive months.
THE OUTLOOK FOR 2011
Looking to the future, the most important factor that brings
growth to the mature Japanese market will be the inbound
segment, i.e. visitors from overseas countries. The Japanese
government is targeting 15 million visitors from overseas by
2013, more than double from 6.7 million in 2009 according
to the Japan National Tourism Organization. The increasing
trend in overseas visitor arrivals will be further promoted by
deregulation in tourist visa requirements for Chinese visitors and
by new direct-flight operations by Low Cost Carriers (LCC) from
key Asian cities.
Regarding hotel investment, Asian money will be key, since
many Asian investors are revealing their passion to acquire
hotels in Japan. In 2011, as KPIs for major hotels improve,
The Japanese government is targeting 15 million visitors from overseas by 2013
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
we may see some one or more transactions for major hotel(s)
in Tokyo, although the specific hotel name(s) are yet to be
disclosed. Also, Asian investors are aggressively searching for
resort properties in Hokkaido, Hakone/Izu (Mt. Fuji area), Kyoto,
and Okinawa, all of which are particularly famous in the eyes
of people in their home countries. Such active movement by
Asian investors is sure to stimulate the market, which will lead
to a comeback of both domestic and Western players in the
near future.
Contributed by Koji Takabayashi
THAILANDSITUATION REPORT
The past few years have been a challenge for Thailand, both
economically and politically. Aside from the impact of the global
financial crisis, the country has had to grapple with internal
political and security issues. Since the coup d’etat in September
2006 which ousted then-Prime Minister Mr. Thaksin Shinawatra,
the country has seen five prime ministers come and go. During
this period of uncertainty, mega projects were stalled and
frequent amendments of government and fiscal policies resulted
in a loss of confidence on the part of investors and consumers.
GDP growth slowed from 5.1 % in 2006 to -2.7 % in 2009, while
growth in international visitor arrivals to Thailand also slowed
from 19.5 % in 2006 to -3.4 % in 2009. According to STR Global,
RevPAR of hotels in Thailand fell by 22.9 % year-on-year in 2009
– the largest negative growth since 2005.
The current Prime Minister Mr. Abhisit Vejjajiva was appointed
at the end of 2008, but the road has been tumultuous as
anti-government movements continue. The protests escalated
and peaked in April/May 2010, when a violent clash broke out
between government troops and anti-government protestors
in downtown Bangkok, resulting in a curfew put in place for
several weeks in Bangkok and 23 other provinces. High-end
hotels in downtown Bangkok, such as the Four Seasons, Grand
Hyatt and Inter-Continental were forced to close for a few
days due to security reasons and extremely low occupancy.
Other hotels in the city operated at occupancy levels of less
than 30 %, and ADR was hit badly. Resort destinations such
as Phuket, Pattaya and Samui, however, experienced minimal
negative impact from the chaos in the capital. As of YTD
September 2010, RevPAR of hotels in Thailand grew by 2.5 %
Resort destinations such as Phuket, Pattaya and Samui, experienced minimal negative impact from the chaos in the capital
Patchwork recovery cont.
R E G I O N A L O U T L O O K : A S I A - P A C I F I C
Siam Kempinski Hotel
year-on-year, largely driven by a slight growth in occupancy,
while ADR continued to slide as the mechanism for inducing
demand during the periods of turmoil in Bangkok.
Since his appointment, Abhisit has administered two economic
stimulus packages – a $40 billion, three-year infrastructure
improvement plan, and a more than $3 billion program featuring
cash subsidies and other initiatives to help the poor, elderly and
farmers. This has helped the export-dependent country ride out
the global financial slump. In 2010, the stock market and the
value of the Thai Baht have rebounded to their highest levels
since the 1997 Asian Financial Crisis, and Moody’s Investors
Service has lifted the outlook for Thailand’s credit ratings from
negative to stable in October 2010.
THE OUTLOOK FOR 2011
Looking forward into 2011, the market will be heavily dependent
on the ability of the government to manage anti-government
sentiments and continue to stimulate the economy.
In recent months, stalled hotel projects in Bangkok have been
restarted and some hotels have finally opened their doors after
much delay. The newest hotel to enter the market is the long
anticipated 303-room Siam Kempinski Hotel, while hotels such
as the Four Points by Sheraton Bangkok (Sukhumvit 15) and
St. Regis Bangkok are expected to open in the coming months.
Hotel developers have renewed their interest in the country, with
more interest in resort destinations than the oversupplied capital.
Contributed by Ho Shyn Yee
INDONESIAJAKARTA
The GFC effects on the Jakarta market were fairly light,
especially compared to other parts of the world or elsewhere in
the region. The sizable and relatively buoyant domestic market
helped keep hotel performances from dipping significantly.
Indonesia’s rather stellar economic performance in 2009, and
proceeding into 2010, has supported trading performances
throughout the last 24 months.
Occ ADR RevPAR Occ ADR RevPAR Occ ADR RevPAR
Top Tier 65% $78 $50 60% $71 $42 62% $84 $52
Mid Tier 75% $50 $38 72% $49 $36 72% $55 $39
Combined 70% $64 $44 66% $60 $40 67% $69 $46
Industry practitioners are cautiously optimistic about the
prospects for 2011 and further leading up to the next
presidential election in 2014. Aiding the outlook is the limited
supply pipeline in the top tier segment with the Raffles at
Ciputra World currently the only confirmed project.
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
By contrast, development of budget/limited service products
under international and domestic brands such as Formule One,
Holiday Inn Express and Amaris (Santika Group) has proliferated
throughout Indonesia, while new budget-oriented products/
brands such as Whiz, Tune, and Pop ! are pursuing aggressive
development strategies.
With improved accessibility facilitating increased domestic
business traffic, the Indonesian government is looking to
improve infrastructure further in order to boost tourism from
both domestic and regional travelers, helping to drive additional
developer interest in Indonesia’s burgeoning budget hotel sector.
BALI
The most affected segment in Bali’s hotel market in 2009 was
the luxury sector, with an almost 20 % decline in RevPAR. By
contrast, the RevPAR decline for the top tier sector was limited
to 65 %, while the mid-tier sector managed a 5 % increase.
Occ ADR RevPAR Occ ADR RevPAR Occ ADR RevPAR
Luxury 65% $373 $243 56% $348 $195 65% $380 $245
Top Tier 76% $131 $100 70% $135 $94 76% $137 $104
Mid Tier 81% $74 $60 82% $77 $63 85% $78 $66
Bali Overall 77% $111 $86 73% $120 $87 76% $134 $102
For YTD September 2010, however, all sectors have
experienced a strong RevPAR rebound. Throughout the past
three year period, Bali has been registering its best ever
performance in foreign visitor arrivals, passing the 2 million
mark and already half way to reaching 3 million. Initiation of the
airport expansion project is expected to support and facilitate
continued growth.
Although the new hotel pipeline is lengthy, many projects have
been delayed due to financing issues, making completion
forecasting difficult. However, some long delayed projects
were finally completed this year or now appear to be moving
Patchwork recovery cont.
R E G I O N A L O U T L O O K : A S I A - P A C I F I C
forward towards completion. Among those opened recently
are the Alila Villas Ungasan, Alila Villas Soori and Banyan Tree
Ungasan, while new lower-tier entrants to the market include a
variety hotels under the Aston, Best Western, Tune and Accor
brands. Like the rest of the country, Bali is experiencing a boom
in mid- to lower-mid-tier hotel development. One of the most
anticipated openings is the W Seminyak, which is now on track
to open in the first quarter of 2011.
Bali is expected to further expand on its status as one of Asia’s
premier holiday destinations with the opening of new resort
products across all sectors. The durability of Bali’s tourist
and holiday traveler appeal continues to make it a developer/
investor favorite. However, increasing traffic congestion and
infrastructure strain in the traditional South Bali tourist areas
such as Kuta, Jimbaran, Legian, Seminyak, Nusa Dua, Pecatu
are becoming threats to the tourist experience and potential
constraints to further growth. As an initial response, the new
regional government of Bali seems to be directing development
towards less congested areas via various incentives and
facilitation, but confronting infrastructure deficiencies remains
an urgent need to be addressed for sustainable tourism growth.
Contributed by Rio Kondo
PHILIPPINESSITUATION REPORT
As with most of the ASEAN countries, the global economic
crisis had a major impact on the economy as well as tourism in
the Philippines in 2009. Despite the drop in several sectors of
the economy, growth in Business Process Outsourcing activities
and remittances from Overseas Filipino Workers (OFWs) lifted
the nation’s GDP by 0.9 %. However, unlike the economy that
managed to rise, the tourism industry had some setbacks.
International tourism arrivals contracted by almost 4 % in 2009,
primarily caused by a 13 % decline in Korean visitors (18 %),
the country’s largest source market, contributing between 15
and 20 % of total international arrivals to the country each year.
The hotel industry was also negatively impacted by the slow
economy and drop in arrivals. According to STR Global, average
occupancy rates across the country declined by 7 percentage
points, while ADR ended almost flat compared to 2008.
Nevertheless, there are some events in 2009 positively affecting
the tourism industry moving forward. One of these is the
opening of the Resorts World Casino complex, including the
342-room Marriott hotel. The complex has boosted tourism-
related activity especially in the city of Manila. The last time a
major international chain hotel entered the market was in 2004
(with the opening of the Hyatt Hotel and Casino).
The durability of Bali’s tourist and holiday traveler appeal continues to make it a developer/investor favorite
Manila Marriott Hotel
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
Present indicators and 3rd quarter YTD performances are
suggesting a major turn-around in the economic and tourism
environment in 2010. Positive sentiments have been running
high since President Benigno Aquino stepped into office. Fixed
investments, both foreign and domestic, have poured in due
to promising indications of better governance. The IMF has
doubled its 2010 GDP forecast to 7 % (from 3.6 % in April) and is
projecting a growth of 4.5 % in 2011. According to STR Global,
September YTD 2010 occupancy performances of hotels
across the country surged by an average of 8 percentage points
while ADR grew by 2 %.
THE OUTLOOK FOR 2011
Unfortunately, the tourism sector has also had its share of
setbacks in 2010 – the bus hostage taking situation in August
and terrorist threats in November instigating travel warnings
from the US, Australia and other governments. Despite these
events, general sentiment remains very optimistic. Hoteliers in
Metro Manila are anticipating strong performances to continue in
2010 and an increase of at least 5 % in ADR and a growth of at
least 3 percentage points in occupancy performances in 2011.
Looking at 2011, we share the same optimistic views, especially
with the rise in economic and tourism activities after the
elections. However, the Philippines still warrants a cautious
outlook given the historically unstable political environment and
continuing security/terrorism threats. Political stability and safety
are still the two most critical factors in determining economic and
tourism industry performances in the country moving forward.
Contributed by Jerome Siy
MALAYSIASITUATION REPORT
In 2009, the H1N1 threat and the economic downturn across
the region led Tourism Malaysia to revise its projected tourist
arrival figures from 20 million to 19 million for the year. Despite
this, the country recorded a 7.2 % increase in visitor arrivals to
23.6 million. However, the increase in arrivals did not result in
an increase in average occupancy levels of the hotel market
(3-star to 5-star hotels) in Kuala Lumpur : 67.0 % in 2009 versus
73.0 % for the previous year. In terms of ADR, the hotel market
registered a small decline of 4.0 % to RM 261 (US$ 74). This was
attrributable to the market’s reaction to the economic downturn
in the country.
The Malaysian economy is expected to improve significantly in
2011, with a positive GDP growth target of 6.4 %, compared to
a 1.7 % decline in 2009. Arrivals for the first 8 months of 2010
rose 5.2% compared to the corresponding period last year to
16.2 million (2009 : 15.4 million). The target of 24 million visitors
for the whole year of 2010 set by the government is likely to be
achieved. This represents a modest 1.5 % increase as opposed
to increases of 7.2 % (2009), 5.1 % (2008) and 19.5 % (2007).
The average occupancy levels of the hotel market in Kuala
Lumpur for the first 8 months improved by 4.0 percentage
Positive sentiments have been running high since President Benigno Aquino stepped into office
Patchwork recovery cont.
R E G I O N A L O U T L O O K : A S I A - P A C I F I C
points to 70.0 % compared to the corresponding year in 2009.
It is expected the whole year’s average occupancy for 2010
will register between 70.0 and 72.0 %. As concerns ADR, it
is estimated the hotel market will achieve a small increase of
between 1.0 and 2.0 % ; i.e. between RM 263 and RM 266 (US$
81 and US$ 82).
THE OUTLOOK FOR 2011
Malaysia has started negotiations with the European Union for
a free trade agreement. Net investment outflow amounting US$
47.2 billion over the last 5 quarters to Q2 2009 was reversed
as net investment inflow of US$ 15 billion was achieved in the
4 quarters to Q2 2010. Recently, Malaysia was upgraded to
« advanced emerging market » status in the FTSE global index.
According to economic analysts, this upgrade could attract as
much as US$ 3 billion in new funds into the country.
In the hotel market, 2011 is expected to see continuing growth
in both the average occupancy levels and ADRs as confidence
returns following the downturn of 2008/2009. The ADR growth
is estimated to be between 3.0 and 5.0 %, while average
occupancy levels are expected to register between 1.0 and 2.0
percentage points. No new major hotels are expected to open
in 2011.
SINGAPORESITUATION REPORT
After climbing to new record heights in ADR and RevPAR
in 2008, the market came tumbling back to earth in 2009
with a 26 % drop in RevPAR as arrivals impacted by the GFC
fell off nearly 5 % and room nights sold declined even more
significantly, by almost 7 %. Hotels responded quickly with rate
discounting to draw in regional visitors, helping limit the demand
decline and occupancy drop to 76 %, but incurring an average
22 % cut in rates in the process.
SINGAPORE HOTEL MARKET PERFORMANCE
2004-2010 (YTD AUGUST)
Demand recovery actually began occurring in the fourth
quarter of 2009, but the primary drivers of the steep « V »
recovery witnessed in 2010 were the opening of the two highly
anticipated mega Integrated Resort complexes : Resorts World
Sentosa in January and the Marina Bay Sands in April.
Singapore’s first casinos may be a primary draw of the
Integrated Resorts, but Resorts World Sentosa also features a
Universal Studios theme park, Festive Walk, four hotels (totaling
1,350 rooms) and soon-to-be-added Maritime Xperiential
Museum, Equarius Water Park and Quest Marine Life Park,
while the iconic Marina Bay Sands, topped off by its towering,
gravity-defying, Sky Park, offers 120,000 m2 of convention/
exhibition space, a 75,000 m2 shopping mall, performance
theater, museum and over 2,500 hotel rooms.
The Malaysian economy is expected to improve significantly in 2011
RevPAR (SGD)ADR (SGD)Occ %
200450 74
76
78
80
82
84
86
88
100
150
200
250
300
$ %
2005 2006 2007 2008 2009 2010
KE
Y M
AR
KE
TS
IN
20
11
HOTELyearbook2011
Despite introducing nearly 4,000 new rooms over the course
of the first six months of 2010, market occupancy grew from
80 % in January to 90 % in July, clearly proving how, sometimes,
when you build it, they will indeed come ! The quantity of
induced demand generated has helped not only to quickly
absorb the new rooms supply, but also spread demand to
uplift hotel occupancies across the market. Along with the
incremental 1.4 million visitors year-on-year recorded as of
YTD August 2010 (+22 %), market ADR also increased to reach
nearly $210 (+11 %).
THE OUTLOOK FOR 2011
Approximately 55 % of the incremental visitor arrivals in 2010
originated from within Southeast Asia, while another 25 % and
6 % originated from North and South Asia, respectively. Another
one million induced/incremental visitors are expected in 2011,
resulting in a forecasted 8 % growth in hotel demand. In addition
to the pull of the two IRs for leisure travelers, Singapore’s
attraction as an international MICE destination has been
enhanced along with the increased capacity provided by the
IRs’ significant allocations of MICE facilities.
With only a « limited » increase in supply of approximately 4 %
(+1,200 rooms), Singapore hotel owners and operators can
look forward to another year of strong demand and occupancy
conditions, and thus ripe conditions for increasing ADRs via
further rate increases and business mix management. As a
consequence, market ADR is expected to grow by at least 15 %
in 2011, bringing with it record profitability to warm the hearts
of existing hotel owners and certainly making Singapore Asia’s
hottest market for hotel investors and developers.
Contributed by Robert Hecker
VIETNAMSITUATION REPORT
After experiencing steady growth until 2007, the Vietnam hotel
market saw weakening demand starting from the beginning of
2008 due to domestic economic issues, well before the onset
of the GFC which exacerbated the market situation for most of
2009, during which RevPAR for the upscale hotel markets in
Hanoi/HCMC fell by 12 %. However, the monthly demand trend
turned positive from the last quarter of 2009 and, as of YTD
One million induced or incremental visitors are expected in 2011
Patchwork recovery cont.
R E G I O N A L O U T L O O K : A S I A - P A C I F I C
Marina Bay Sands
Resorts World Sentosa
September 2010, occupancy surged by 10 percentage points to
61 %, while RevPAR has almost recovered to 2008 levels. This
suggests the market is back on track.
HISTORICAL REVPAR COMPARISONS, UPPER-TIER MARKET,
HANOI AND HCMC
Source : Horwath HTL
Both the Ho Chi Minh City (HCMC) and Hanoi upper-tier hotel
markets have undergone tough times, but HCMC suffered slightly
more, given its more corporate-oriented market. Historically, the
HCMC hotel market has always overshadowed Hanoi in terms
of RevPAR, but going through the recent recession, the gap
between the two markets has noticeably narrowed.
The decreased number of inbound leisure travelers over the
prior two years was somewhat counterbalanced by a booming
domestic tourism market. As a result, hotels and markets
focused more on the domestic market performed better in
comparison to the Upper Tier hotels in HCMC and Hanoi that
generally cater heavily to foreign corporate business. According
to the 2008 annual Global Retail Development Index TM (GRDI)
published by AT Kearney, Vietnam was selected the most
attractive retail market in the world, driven by strong GDP
growth and increasing consumer demand for modern retail
concepts. The domestic tourism market also benefited from
this trend and the country’s major leisure destinations in central
coast such as Da Nang/Hoi An and Nha Trang saw continued
growth in domestic demand even during the global recession.
As a result, hotels in the Da Nang/Hoi An area experienced only
a minor 4 % drop in occupancy, while ADR and RevPAR have
grown, albeit slightly.
Accordingly, most new hotel projects are seen in the central
coast area. For instance, as of September 2010, there are
approximately 3,800 new hotel rooms coming only in the Da
Nang/Hoi An market area. About 70 % of these new rooms
will be under international branding and management, some
of which are scheduled to open by the end of 2010. By
comparison, new hotel development in HCMC and Hanoi is
moving at a much slower pace, with little international branded
supply expected to enter the market within the next five years.
THE OUTLOOK FOR 2011
The booming domestic leisure market is expected to continue,
as there is increasing demand for modern leisure life. As a result,
hotel market growth will be driven heavily by the leisure demand
segment in 2011 and the next several years. According to a
recent Horwath HTL study, room demand in Da Nang/Hoi An is
anticipated to grow by 15-20 % per annum for the next several
years. The HCMC and Hanoi markets are also expected to grow,
but at a slower pace, especially compared to the level of growth
experienced during the boom period between 2000 and 2007.
Contributed by Steve Baek
Jan 2
009
MarMay Ju
lSep Nov
Jan 2
010
MarMay Ju
lSep
Rev
PAR
(vnd
)
500,000
1,000,000
Hanoi
HCMC
1,500,000
2,000,000
KE
Y M
AR
KE
TS
IN
20
11
AUSTRALIASITUATION REPORT
The Australian hotel industry has continued to recover in 2010
from what, in global comparative terms, was a mild downturn
during the GFC. Having been one of the few countries to
avoid negative GDP growth, Australia’s real GDP is expected
to grow by 2 % in 2009/10 and by 4 % in 2011/12, driven by
surging mining exports predominately to China and India.
Unemployment remains at only 5 % and corporate profits have
held up, both of which have supported hotel demand.
Visitor arrivals are expected to reach 5.9 m in 2010 (up 5.5 %)
however the domestic leisure market continues to suffer from
cheaper outbound destinations, in part due to the sharp
appreciation of the Australian dollar and the increased number
of low cost carriers. Further growth in inbound demand will
largely be dependent on the rate of recovery in Australia’s major
inbound markets (including New Zealand, Japan, USA and the
UK) and on continued growth from China. Domestic business
travel has also improved in several capital cities, resulting in
many hotels experiencing stronger mid-week occupancies.
Patchwork recovery cont.
R E G I O N A L O U T L O O K : A S I A - P A C I F I C
The domestic leisure market continues to suffer from cheaper outbound destinations
As an indication of the strength of recent demand, data
provided by STR Global reveals that in Q1 2010, Sydney
achieved the highest level of occupancy (85 %) among any
of the Asia-Pacific city markets that STG Global tracks. YTD
occupancy for Sydney is 83 % (a 9 % increase over last year),
while RevPAR has increased 13 %. Due mostly to recent new
room supply, RevPAR for Melbourne has only increased 1.5 % in
2010 year to date.
HOTEL INVESTMENT
Demand for Australian hotels remained strong during the GFC and
values held up well, although transaction volume fell markedly.
During 2009/10, demand from cashed up Asian investors resulted
in several notable transactions, particularly in Sydney, including
the sale of Australia’s largest hotel by number of rooms, the
Four Points by Sheraton in Sydney. Sellers were predominantly
domestic investment funds taking advantage of firm values and
aiming to meet redefined investment strategies. Contrary to
expectations, few distressed hotel asset sales occurred.
THE OUTLOOK FOR 2011
Buy sentiment for Australian hotel assets remains strong with
sentiment survey data prepared by Jones Lang LaSalle Hotels
in May 2010 indicating Perth, Brisbane and Sydney to be
respectively the first, fifth and eighth most desirable markets for
hotel purchases in the Asia-Pacific region. In contrast, the Gold
Coast represented one of the highest sell markets in the survey.
Contributed by John Smith and Vasso Zographou
NEW ZEALANDSITUATION REPORT
The New Zealand economy continues on a recovery path
with export commodity prices increasing markedly, aided by
recent currency depreciation and the strength of its key trading
partners, particularly Australia and Asia. Household spending
is growing firmly and private consumption is now close to pre-
recession levels. As a result, GDP is expected to grow from
2.8 % in 2009/10 to 4.2 % in 2010/11.
International visitor arrivals to New Zealand in 2009 held up and
in 2010 a modest lift is expected mostly from growth in short-
haul markets from the Asia Pacific region. Demand in 2011 will be
supported by New Zealand’s hosting of the Rugby World Cup.
RevPAR in Auckland, Christchurch and Queenstown dropped
by over 10 % during 2009, mostly due to rate discounting, and
now faces the challenge of new hotel and serviced apartment
supply increases during 2010.
THE OUTLOOK FOR 2011
Transaction volumes remain low and buy sentiment for New
Zealand hotel remains weak with Auckland rating third lowest in
Asia Pacific in the JLL May 2010 sentiment survey.
Contributed by John Smith and Vasso Zographou
Demand in 2011 will be supported by New Zealand’s hosting of the Rugby World Cup
KE
Y M
AR
KE
TS
IN
20
11
